Workday's Loss Widens
Economic and political uncertainty are weighing on Workday Inc.'s business with several large deals being pushed back,
the cloud-based, human-resources software company said Thursday.
In a conference call with analysts, company co-founder and Chief Executive Aneel Bhusri said some large contracts that
were expected to close in the fourth quarter had been held up with customers, particularly financial service firms based
in Europe, citing uncertainty over Brexit as well as elections in the U.S. and other Group of Eight leading nations,
such as France and Italy.
Specifically, Mr. Bhusri said, some of the concerns revolved around "rhetoric around trade agreements" and
protectionism along with the potential business impact if the U.K. leaves the European Union.
"We suspect and hope these are isolated events that will be short-lived," Mr. Bhusri said.
Workday now projects revenue of $1.56 billion to $1.563 billion for the year that ends in January, slightly above
analysts' revenue target.
Shares, up 2% this year, fell 12% to $72.15 in after-hours trading.
California-based Workday has reported a string of annual losses since it was founded in 2005 as it spends heavily to
expand operations. Its deficit stood at $1.42 billion as of Oct. 31.
Over all, Workday's third-quarter loss widened 47% to $114.1 million, or 57 cents a share. Excluding stock-based
compensation and other items, profit rose to 3 cents from break-even a year earlier.
Revenue rose 34% to $409.6 million with subscription revenue, which accounts for the bulk of business, increasing 38%.
But costs rose to $519.5 million, up 38% from the year-ago period.
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